Loehmann's to close up to 15 stores over 12 months

New York City Discount department store retailer Loehmann's said late Thursday that it will shutter as many as 15 stores over the next year and sell off the inventory.

Loehmann's Capital Corp., which is restructuring debt coming due next year, said more than half of its noteholders have agreed to let the company close the stores.

Loehmann’s, which is owned by Dubai investment group Istithmar, a unit of Dubai World, operates 60 stores in 16 states.

Noteholders signed a consent solicitation that allows for a higher cap on borrowing that will let Loemann’s increase its revolving credit facility by $10 million, the company said. In September, Loehmann's opened a debt exchange due Oct. 27 to exchange two classes of notes due in 2011 for corresponding notes due in 2014. It needs 97% of holders to approve the exchange.

According to an Oct. 14 release, the deadline for holders to receive $1,000 of new notes in exchange for $1,000 of old notes is October 22. A previous release said that date to receive those exchange terms was Oct. 13. Holders who exchange after Oct. 22 will receive $970 in new notes for each $1,000 in old notes, the company said